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Immigrants are more likely than the general population to start businesses, according to a new report by human resources company Gusto.
The report, based on surveys with the platform’s users, shows that 17 percent of businesses founded in 2023 nationwide were run by immigrants, even though immigrants make up only 14 percent of the population.
This trend is even more prominent in Houston, where immigrants make up 24 percent of the population but nearly 42 percent of entrepreneurs, according to a February 2024 report by the American Immigration Council.
“When we're talking about big numbers, Houston is the poster child for being able to throw up huge numbers on the economic impact that immigrants and particularly immigrant entrepreneurs make on the Houston area,” said Chelsie Kramer, Texas organizer for the American Immigration Council.
This trend is on full display in Colony Ridge, a development 40 miles north of Houston where immigrants have opened restaurants, barbershops and more, as the Abdelraoufsinno previously reported. There, immigrants from Panama, Mexico and beyond have opened businesses and employed local residents, providing a contrast to the predominant narrative from Republicans of Colony Ridge as a place of crime and drug cartels.
Immigrant-owned business trends
As November elections near, the economy is the top issue for voters, followed by defending the country against terrorism, according to a February 2024 Pew Research Center poll. Immigration is also a top 10 issue.
Texas Gov. Greg Abbott has touted the strength of the Texas economy, but denied any evidence that immigrants were contributing to growth.
Yet recent research on economic development in Houston shows that immigrants – and immigrant entrepreneurs – are a key driver of the economy.
Immigrants in Houston are most likely to start businesses in construction, followed by professional services. They also start businesses in transportation, finance, hospitality and manufacturing, according to the American Immigration Council report.
“A lot of people don't realize that a lot of the businesses and establishments that they're going to on a regular basis, whether that be their dry cleaners, their favorite restaurant, their pediatrician’s office, a lot of these establishments are immigrant-owned,” Kramer said.
“A lot of folks just don't take that into account or just don't think about it because it just seems so normal and natural here in the Houston area,” she added.
Immigrant-owned businesses were also more likely to hire employees, with 85 percent having at least one employee compared to 78 percent of all the businesses surveyed, according to the Gusto report.
“This suggests that immigrants own growth-oriented firms and firms looking to make a mark quickly,” said Nicholas Tremper, Senior Economist at Gusto.
Houston’s immigrants are a key factor contributing to the city’s economic growth, according to a March 2024 report by the Greater Houston Partnership. From 2017 to 2022, Houston’s GDP grew by nearly 35 percent to more than $633 billion. Foreign workers accounted for about one-fourth of that growth.
“Immigrants are risk-takers. They left their homes and their families to start new lives in a different country,” the report states. “Risk-taking begets innovation, which generates new ideas, new technologies and new growth opportunities.”
Kramer emphasized that Texas has a “robust environment” for immigrant-led businesses and encouraged policymakers to continue to make Houston and Texas a welcoming place for immigrant business ownership.
“All of our policymakers really need to take this into account when they're thinking about policies that would make Texas a more welcoming and desirable place for immigrants to come and start their businesses,” Kramer said.
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